MUMBAI: Assuaging the panic-stricken stock market, regulator SEBI on Wednesday asked investors not to be carried away by rumours with its Chairman M Damodaran saying that the proposals on Offshore Derivative Instruments (ODIs) were a well-designed package.
"Investors should see what period they are investing and remain within their set horizon, not be swayed by rumours", he said here reacting to crash within minutes of the opening of the market, which cut its losses after assurances from Finance Minister P Chidambaram that the government was not against Participatory Notes (PNs).
On the issue of SEBI's proposal to curb issuance of ODIs by Foreign Institutional Investors, Damodaran said, "It is a well designed package and we have a period of four days to debate on the package."
The proposals as part of a discussion paper, seeking comments from the public by October 20, triggered a more than 1,700 point crash in the market on Wednesday, prompting suspension of trade for an hour.
However, the losses were made up by more than half shortly after trading resumed.
Meanwhile, in a bid to prompt FIIs to invest in the country, Damodaran said, "We are looking at encouraging FII registration, process will be simplified soon."
Stating that the regulator does not take much time in clearing FII applications, he said money routed to India through FIIs is clean and the regulator knows from where it is coming.
However, in case of PNs, Damodaran said though the money comes from limited number of players, it is difficult for the regulator to track.
When asked whether SEBI was undertaking a systemic correction, Damodaran said, "Process timings and policies need to be improved" as and when necessary."
On whether Indian money was being re-routed through PNs, he said, "We are keeping vigil and will react with policy measures."
